Amkor Technology (NASDAQ: AMKR) reported Q3 EPS of $0.38, $0.12 better than the analyst estimate of $0.26. Revenue for the quarter came in at $1.35 billion versus the consensus estimate of $1.25 billion.

Third Quarter Highlights

• Record third quarter net sales $1.35 billion, up 25% year-on-year and 15% sequentially
• Operating income $127 million, operating income margin 9.4%
• Net income $92 million, earnings per diluted share $0.38
• EBITDA $255 million
• Initiation of a regular quarterly cash dividend of $0.04 per share

“Stronger than expected demand in the communications and automotive and industrial end markets drove revenue above the high end of our guidance,” said Giel Rutten, Amkor’s president and chief executive officer. “The Board’s decision to initiate a dividend is a significant milestone for Amkor. Over the past several years, Amkor has capitalized on growth opportunities in advanced packaging technologies that target 5G, advanced automotive systems, IoT and high-performance computing, and the introduction of a regular cash dividend reflects our consistent operating performance, strong free cash flow generation and confidence in our long-term financial outlook.”

“All-time record quarterly revenue drove operating income margin to 9.4% and EPS to $0.38 for the quarter. We also paid down $230 million of debt this quarter, bringing our net debt to $0.4 billion, the lowest in our public company history,” said Megan Faust, Amkor’s executive vice president and chief financial officer. “The initiation of a dividend expands Amkor’s capital allocation strategy for delivering value to stockholders. Our consistent free cash flow and strong balance sheet give us the financial flexibility to continue to make investments in future growth opportunities and return capital to stockholders.”

GUIDANCE:

Amkor Technology sees Q4 2020 EPS of $0.28-$0.47, versus the consensus of $0.23. Amkor Technology sees Q4 2020 revenue of $1.25-1.35 billion, versus the consensus of $1.23 billion.

“Continued strength in advanced packaging and a recovering automotive end market are expected to drive solid revenue performance in the fourth quarter of 2020,” said Rutten. “Growing demand and share gains in the communications end market is expected to drive year on year revenue growth of 10% in the fourth quarter.”

Fourth quarter 2020 outlook (unless otherwise noted):

• Net sales of $1.25 billion to $1.35 billion
• Gross margin of 17% to 20%
• Net income of $68 million to $115 million, or $0.28 to $0.47 per diluted share
• Full year 2020 capital expenditures of approximately $550 million

For earnings history and earnings-related data on Amkor Technology (AMKR) click here.